AOF GLOBAL FOUNDATION,MUMBAI vs. WARD 12(1)(1), MUMBAI

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ITA 1699/MUM/2026Status: DisposedITAT Mumbai30 June 20266 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the rejection was primarily due to non-compliance without examining the assessee's evidence. To meet the ends of justice, the matter was restored to the CIT(Exemptions) for fresh adjudication after providing the assessee an opportunity to present its case.

What were the facts?

The assessee's application for registration under Section 12A was rejected by the CIT(Exemptions) for alleged non-compliance with notices. The assessee claimed to have missed the notices due to bona fide reasons and sought another opportunity to submit explanations and documents.

What were the issues?

Whether the CIT(Exemptions) erred in rejecting the registration application without considering the assessee's submissions and evidence, and whether the notices were effectively served.

Which sections of the Income-tax Act were involved?

Section 12A,Section 11,Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SMT. BEENA PILLAI & SHRI JAGADISH

For Respondent: Shri Manoj Kumar (CIT-DR)

आदेश / ORDER PER SMT. BEENA PILLAI, JUDICIAL MEMBER: Present appeal is directed against the order dated 01/12/2025 passed by the Ld. CIT(Exemptions) rejecting the assessee's application seeking registration u/s 12A of the Income- tax Act, 1961, on the following grounds of appeal:- “1) Ground 1. The learned CIT(E) erred in not considering that section 11 is a computation/exemption provision applicable at the stage of assessment of income of the appellant by the Assessing Officer, and that its provisions cannot be a basis for denying registration under section 12AB at the pre-registration stage.

2) Ground 1.1.The learned CIT(E) erred in not considering that the provisions of section 11(1)(c) of the Act are attracted only when actual expenditure is incurred outside India and cannot be invoked merely on the ground that the Memorandum of Association provides for activities outside India, as it would tantamount to rejection on the basis of surmises and presumptions.

3) Ground 1.2.The learned CIT(E) erred in invoking the provisions of Section 12AB to deny registration on a ground the potential future application of income outside India which does not constitute a specified violation within the meaning of the Explanation to section 12AB(4) of the Act.

4) Ground 1.3.The learned CIT(E) erred in his interpretation, as the scope of inquiry under Section 12AB is limited to satisfaction about (A) the genuineness of activities of the trust OR institution and (B) compliance of such requirements of any other law as are material for the purpose of achieving its objects, and does not extend to a pre-determination under section 11.

5) Ground 1.4. The learned CIT(E) failed to follow the binding decisions of the coordinate bench of the ITAT, Mumbai in Odhavji Chanabhai Peraj Charity Trust (ITA Nos. 1164 1165/MUM/2025, decided 28.07.2025) and Dedhia Music Foundation (ITA Nos. 743 744/MUM/2025, decided 02.04.2025), which have squarely held that existence of any object for carrying out any activity outside India will not enable the CIT(E) to deny registration under section 12AB of the Act.

6) Ground 1.5. The learned CIT(E) failed to follow a plethora of judicial pronouncements, including the binding judgments of the Honble Delhi High Court in M.K. Nambyar SAARC Law Charitable Trust v. Union of India (2004) 269 ITR 556 (Delhi) and that of the Honble Punjab and Haryana High Court in Surya Educational and Charitable Trust (2011) 355 ITR 280 (P H), which held that application of income outside India is not a relevant criterion for rejecting an application for registration and that the officer has to restrict himself to satisfaction about the objects and genuineness of activities of the trust.

7) Ground 1.6.The CIT(E) has erred by not following the principle of uniformity, by granting registration to other assessees with similar and identical clauses and selectively rejecting the appellants registration application, thereby not following the directions of the Jurisdictional High Court in the case of CIT v. Smt. Datta Mahendra Shah, (2015) 378 ITR 304 (Bom).

8) Ground 2. The learned CIT(E) erred in issuing the Show Cause Notice dated 4 November 2025 and Reminder notice dated 19 November 2025 through the For Your Information tab of the e-Proceedings module on the income tax portal, which does not generate any email OR SMS alert to the assessee, and in treating the Appellants consequent non-response as wilful non-compliance.

9) Ground 2.1 The learned CIT(E) erred in issuing the reminder notice dated 19 November 2025 also only through the For Your Information tab, again without any email OR SMS communication, and in thereafter passing an ex-parte order against the Appellant. 2.2 The learned CIT(E) erred in failing to note the manifest inconsistency that while the Show Cause Notice and reminder the substantive notices were uploaded without email/SMS alerts, the final adverse rejection order was actively communicated to the Appellant via email and SMS. 2.3 The learned CIT(E) erred in not verifying whether the Appellant had in fact received and was aware of the Show Cause Notice, before passing the impugned rejection order.

10) Ground 2.4 The learned CIT(E) erred in not affording the Appellant any opportunity to place on record its explanation in respect of the specific object clauses identified as allegedly violating section 11 of the Act. 2.5 The learned CIT(E) erred in holding that the Appellant failed to comply with the Show Cause Notice dated 4 November 2025 and the reminder dated 19 November 2025, without first satisfying himself that the said notices had been effectively served upon and brought to the actual knowledge of the Appellant.

11) Ground 3. The Appellant craves leave to add, alter, delete OR modify all OR any the above ground, before the final date of hearing OR at the time of hearing.”

Briefly stated, the assessee had filed an application seeking 2. registration u/s 12A of the Income-tax Act, 1961 before the Ld. CIT(E). During the course of the proceedings, the Ld. CIT(E) issued notices calling upon the assessee to explain certain aspects relating to its objects and eligibility for registration. However, according to the Ld. CIT(E), there was no compliance on the part of the assessee. Consequently, the Ld. CIT(E) proceeded to reject the assessee's application vide order dated 01/12/2025, inter alia, holding that the assessee had failed to furnish the requisite explanation and documents in support of its claim for registration u/s 12A of the Act.

Aggrieved by the said order, the assessee is in appeal before us.

3.

During the course of hearing, the Ld. AR submitted that the impugned order passed by the Ld. CIT(E) is liable to be set aside as the same has been passed primarily on account of the alleged non- compliance with the notices issued during the course of the proceedings. It was submitted that the assessee could not respond to the notices due to bona fide reasons and that the relevant explanations and documentary evidences could not be placed before the Ld. CIT(E). The Ld. AR further submitted that one more opportunity may be granted to the assessee to place all the requisite documents and explanations in support of its application seeking registration u/s 12A of the Act.

The Ld. DR, on the other hand, relied upon the order of the Ld. CIT(E).

We have perused the submissions advanced by both sides in light of the record placed before us.

4.

We find that the application of the assessee seeking registration u/s 12A of the Act has been rejected by the Ld. CIT(E) primarily for want of compliance with the notices issued during the course of the proceedings, without the benefit of examining the explanations and documentary evidences which the assessee now seeks to place on record. In our considered opinion, the interest of substantial justice would be met if one more effective opportunity is afforded to the assessee to substantiate its claim for registration. Accordingly, we set aside the impugned order and restore the matter to the file of the Ld. CIT(E) for de novo adjudication. The Ld. CIT(E) shall consider all the explanations, evidences and other material that may be furnished by the assessee and thereafter decide the application afresh by passing a reasoned and speaking order in accordance with law after providing adequate opportunity of being heard. The assessee is also directed to extend full cooperation and avoid seeking unnecessary adjournments.

In the result, appeal filed by assessee is allowed for statistical purposes.

Order pronounced in the open court on 30/06/2026.

Sd/- Sd/-

JAGADISH BEENA PILLAI ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 30/06/2026 SC, Sr. P.S.

Copy to: AOF GLOBAL FOUNDATION, A 802, NAVKAR PARADISE, BABHAI NAKA, L T ROAD, BORIVALI WEST S.O, 1 MUMBAI, MUMBAI, 400092, MAHARASHTRA, INDIA, MUMBAI-400092, MAHARASHTRA WARD 12(1)(1), AAYKAR BHAWAN, MAHARSHI KARVE RD, NEW MARINE LINES, 2 CHURCHGATE, MUMBAI, MAHARASHTRA 400020, MUMBAI-400020, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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